![Better](https://cdn.builder.io/api/v1/image/assets%2Fea37b90b89334a2ab1714e2159c75418%2Fe2da67fb77e4423989a8b49ac50cb0aa?{"fit":"thumb","width":100})
You’ve found your dream home, and you’re ready to move forward. Now, it’s time to make an offer that satisfies every party. If you bid too high, you risk spending more than you need to — but if you bid too low, you risk losing the house to another buyer.
Discover how much to offer on a house to win the bid without stretching your budget. You’ll learn which questions to ask, when it makes sense to go higher or lower, and how to strengthen your bid to make it as attractive as possible.
What should I offer on a house? Questions to ask yourself and your agent
Craft a practical bid by reviewing your goals and your financial resources. Here are a few questions to ask yourself, your agent, and the listing agent before making an offer.
Ask yourself: What’s your budget?
Think about if you can afford the home without straining your finances. It’s easy to stretch your budget when you find a home you love, which is why it’s so important to be realistic and thoroughly crunch the numbers.
The price of the home isn’t the only consideration. Think about closing costs, property taxes, and maintenance costs. Keep in mind that interest rates factor in, but these can vary depending on the mortgage. Many lenders, including Better, offer pre-approvals that don’t hurt your credit score, so there’s no reason not to shop around to find a loan with favorable terms.
Ask yourself: How much do you really want the home?
Consider how much the house means to you. If it’s your dream home, you may bid at or above the asking price so it doesn’t get away. But if you’re looking for a simple starter home and expect to upgrade to something else in the future, you might be comfortable risking a lower bid for a better deal.
Ask your agent: How long has the home been listed for?
If the house has been on the market for several months or more, the owner may be more motivated to sell. This could give you more room for negotiating the price down, especially if it’s been reduced before. You can typically find a house’s price history through its listing or by asking your real estate agent.
Ask your agent: Is it a seller's market or a buyer's market?
A seller’s market is when the demand for homes outnumbers available homes. A buyer’s market is the reverse: too many homes and not enough people to buy them.
In a seller’s market, you may have to make do with the asking price as offered or even bid a little higher. If it’s a buyer’s market, you have a chance to land a better deal because sellers may be more flexible on pricing.
Ask your agent: How does the price compare to similar properties in the area?
Gauge how reasonable the listing price is by looking at houses in the same location with a similar size and condition to the home you’re interested in. Real estate professionals often call these properties “comps.” Your agent is invaluable here — they typically have extensive market experience and know exactly what to look for.
Ask the listing agent: What condition is the property in?
Is the house move-in ready, or does it need some work? If it needs updates, you might be able to offer less. Tour the home, ask the listing agent for their opinion, and get an appraisal to approximate the value.
When should I offer more than the asking price?
There are a few situations where offering more than the asking price makes sense. Offers above the listing price are common in a seller’s market because the owner is likely to receive plenty of bids. This tight competition means each prospective buyer has to up the ante to have a chance to secure the home.
How much above the asking price should I offer?
What counts as a reasonable offer depends heavily on the market. If it’s a more balanced market, you might get to the top of the pile by offering just a few percentage points over the listing price. For example, bidding $306,000 on a $300,000 home (a 2% increase). But in a hot seller’s market, you may have to go up to 5%, 10%, or occasionally, even more.
Keep in mind that markets can look very different depending on what part of the country you’re in. Offering 5% over the asking price may be par for the course in a large city like San Francisco but unheard of in a small town. Your real estate agent can provide advice and help you adjust your bid accordingly.
When should I offer less than the asking price?
Offering lower than the asking price might make sense if the property needs significant work, it’s a strong buyer’s market, or the home has been listed for a few weeks or months. Striking the right balance can help you land a great deal without turning off or even offending the seller with a lowball offer. Ask your agent their opinion, and they can help you craft a fair bid.
How much less can you reasonably offer on a house?
Deciding how low you can reasonably bid is tightly tied to the area and situation. If it’s a seller’s market, there are plenty of other bidders competing with you, so there’s not a lot of room to haggle. In a buyer’s market, you have a little more leeway. Imagine a home with few bidders that needs a handful of updates — you may get away with offering 1–5% under the asking price.
Tips for making a strong offer
Your bid isn’t the only part of an offer — you can improve your odds with factors like a generous earnest deposit or a flexible closing time. Here are a few ways to stand out from the crowd.
Increase your earnest money deposit
Earnest money is a security deposit that lets sellers know you’re serious about purchasing the property. The usual range is 1–3% of the purchase price, but going a little higher shows sellers you’re ready to close.
Consider waiving some contingencies
Contingencies make the sale conditional on certain circumstances, and waiving them can reduce friction for the seller. For instance, an appraisal contingency allows buyers to back out of a deal if the appraised value is lower than the agreed-upon price. Removing contingencies for the seller makes the process smoother for them and can sweeten your offer. This can be risky, as it removes some buyer protection, so only take this route if your agent advises it.
Be flexible on the closing timeline
Working around the seller’s schedule can ease their stress and make your offer more appealing, whether they’re hurrying into their new home or still mid-search. While a tight closing date is appealing to many sellers, it can be challenging to rush the sale. Thankfully, you can significantly speed up approvals and documentation with Better. Close 17 days faster than the industry average while enjoying a comprehensive process and favorable loan terms.
...in as little as 3 minutes – no credit impact
What’s a good offer on a house? Reasonable bids at a glance
While it depends on the area, market, and target home, many offers stay within 5% of the asking price. Here’s a look at reasonable bids for different price points.
Bidding below the asking price
| Asking price | 1% below | 2% below | 3% below | 5% below |
|---|---|---|---|---|
| $200,000 | $198,000 | $196,000 | $194,000 | $190,000 |
| $300,000 | $297,000 | $294,000 | $291,000 | $285,000 |
| $400,000 | $396,000 | $392,000 | $388,000 | $380,000 |
| $500,000 | $495,000 | $490,000 | $485,000 | $475,000 |
| $600,000 | $594,000 | $588,000 | $582,000 | $570,000 |
Bidding above the asking price
| Asking price | 1% above | 2% above | 3% above | 5% above |
|---|---|---|---|---|
| $200,000 | $202,000 | $204,000 | $206,000 | $210,000 |
| $300,000 | $303,000 | $306,000 | $309,000 | $315,000 |
| $400,000 | $404,000 | $408,000 | $412,000 | $420,000 |
| $500,000 | $505,000 | $510,000 | $515,000 | $525,000 |
| $600,000 | $606,000 | $612,000 | $618,000 | $630,000 |
Close a fair deal with Better
The right bid isn’t always obvious, but with these tips and your agent’s help, you can pitch a reasonable offer and secure your dream home. Before you dive into bidding, make sure you know what you can afford by getting pre-approved with Better. It takes as little as three minutes to apply, receive your letter, and understand your ideal price range — this step also makes your offer more attractive.
Once you’ve worked out the perfect bid, partner with Better to get an affordable loan with competitive interest rates. Get the funds in your account in as little as seven days, and show the seller you’re serious about the sale.
Streamline your search and find a great home with Better.
...in as little as 3 minutes – no credit impact
FAQ
How do I know how much to offer on a house?
Work with your real estate agent to consider your budget, assess the condition of the property, and compare the asking price to similar sales in the area. Note whether it’s a buyer’s market or a seller’s market and how long the home has been listed. Suppose a home’s been listed for two months in a buyer’s market — this is generally a good time to offer lower than the asking price.
How much lower can I offer on a house?
It depends on the property and market conditions in your area, but in most cases, a few percentage points is the maximum. It isn’t common to bid beyond 5% below the asking price.
Why is it important to get a pre-approval letter from your lender?
Having a pre-approval letter reassures the seller that you’ll be able to secure financing. During pre-approval, your lender will look at factors like your credit, income, and existing debts to determine your interest rate and how much you can borrow. This information shows the seller you’re a reliable buyer and increases the likelihood that they’ll choose your offer.